The biotechnology sector thrives on innovation and creativity and relies on substantial investment in research and development.
Patents play a pivotal role in minimising the risks involved in these intellectual efforts, providing a necessary insurance for the immense investment of time and resources spent developing new medical solutions, particularly for start-ups.
They foster an environment conducive to innovation and competition, offering a balanced exchange between public disclosure and exclusive rights, which is crucial for the sector's sustained growth and contribution to society.
This article explores the role of patents in the biotechnology industry – why they’re needed, how they’re obtained and what the ethical considerations are.
Patents protect ideas
Biotech companies play in the highly regulated human health and medicine space.
Their asset pipelines, often the product of extensive research and clinical trials, are worth little without the intellectual property (IP) that surrounds them, such as safety and dose data, and clinical processes and methods.
Patents serve as a protective shield for these ideas, ensuring that a company retains exclusive rights over its innovations, which are often many years in the making.
The absence of patent protection would significantly diminish the incentive to invest in a biotech's research and development because that IP would essentially be open source.
The patent system works by offering a limited-term monopoly to companies, encouraging them to innovate and share their knowledge with society.
In return, governments grant exclusive rights over the commercial exploitation of these innovations.
In Australia, the patent box tax regime, which provides for a concessional tax rate on patent profits, fosters and safeguards the innovation and, importantly for the government, keeps it within the country.
Warding off imitations
Patents not only provide a competitive advantage but also reduce risk. They act as a deterrent against competitors replicating or infringing upon a company's innovations during what are often long and intensive clinical trials.
They ensure that the company’s bread and butter isn’t taken away by opportunists while it is putting in the hard graft.
In biotechnology, where the risk is inherently high, patents also offer reassurance to investors, being a third-party validation of the invention's novelty and technical merit.
The scope of what can be patented in biotechnology is broad, encompassing new compounds, processes or methods of use.
In Australia, an invention must be novel, involve an inventive step and be useful to qualify for patent protection. However, the patentability of certain biotech inventions, like DNA sequences, varies across jurisdictions.
The role of bioethics
Bioethical considerations play a significant role in biotech patents. While micro-organisms and genetically engineered plants or animals can be patented, natural genes and the human body cannot.
The Myriad case, involving a breast cancer gene sequence, typifies the evolving bioethical landscape in patent law, emphasising that naturally occurring genes cannot be patented.
Applying for a patent is a strategic decision that biotech companies must carefully navigate.
The standard patent term in Australia is 20 years, with possible extensions to account for the lengthy regulatory processes in the medical biotech sector.
Prudent biotech companies should file patent applications early, ideally before clinical trials, to ensure the novelty of their inventions is protected.
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